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9 Reasons to Save Money as a Teenager (Use these Talking Points)

Convince your teens that saving money is not only “cool”, but super empowering, using these reasons to save money as a teenager.

There’s a small percentage of teens who naturally hoard their money from the time they first get their hands on some as a child, all the way into their adult lives.

teen girl with parents on couch and big piggy bank, text overlay "9 reasons teens should save money - parent talking points"

But most don’t.

Meaning at some point, you’ll likely need to convince your teens to actually save their money.

Not only am I going to go through the usual, ho-hum, reasons to save money (that get people like me – a self-proclaimed money nerd – really excited).

BUT, I’m going to introduce these reasons with a teen angle so that your teenager is more likely to:

  • a) grasp the subject
  • b) get excited by the potential of saving their money
  • c) see the importance of saving money as a teenager

Reasons to Save Money as a Teenager

Saving money is part of teen money management, but it might not come naturally for your teenager.

Next time your teen asks for reasons why they have to save money, simply pick from one of these explanations below. 

Hint: I’m starting each one of these reasons with the word “because”…because that was one of my favorite words to use as a teen (did you ever default to that when, as a teen, someone wanted an explanation?).

1. Because Saving Money Gives You More Control

Kids want more and more control as they age. And by the time they’re teens? Well, they not only want it, but they demand it.

Control over how they dress. Control over when they have to be home with the family. Control over what they eat. Control over who they hang out with. Etc. etc. etc.

Approach your teenager with the concept that the best reason to save their money is to actually give them more control over it.

Think of a river as the cash flow in your life, just constantly flowing by you.

It’s nice and all…but do you know what can be accomplished when you intentionally divert some of that river towards another area, and “pool” some of that money for your own use, later?

Could be a good analogy to approach this topic of conversation with your teenager.

Hint: and if they say they don’t have a job and can’t possibly do this, then definitely check out my article on how to save money as a teen with or without a job.

2. Because Saving Money Sets You Up for More Fun in Your 20s

To be honest, there's lots of fun to be had in your 20s.

Becoming an adult with more responsibilities, control, and rights is quite cool.

But do you know what can really goof that up?

Not having any money to do anything with. OR, having only enough to subsist on a parent’s couch/their old bedroom.

You don’t want your teenager to be in a position where they have a great opportunity open up and could only take it if…they had some money saved.

For example:

  • Study abroad opportunity
  • Job break with a move involved
  • Spring break trip with college friends
  • Etc.  

3. Because Teens Need an Emergency Fund, Too

Your teenager might never have heard of an emergency savings fund – a savings space where you keep money that should only be used in the case of emergency.

But that doesn’t mean they shouldn’t have one.

As a child ages into teenage-hood, they take on increasing responsibilities, and own more adult-like things that take adult-like funds to maintain and repair.

A teen might need an emergency fund to:

  • Pay for a car repair (flat tire, failed inspection issues, car accident costs, etc.)
  • Pay for lost school property (ugh – this was my personal experience, when I lost a $328 band tunic and had to pay for it out of my own pocket. Writing that check at 17 hurt!)
  • Random data overages – surprise bills!
  • Get out of pickles that creep up (since they’re new to this money management + adult responsibilities thing)

Psst: check out my article at what age can you start building credit.

4. Because Parents Won’t Be Paying for Everything Anymore

At some point – and this may have already happened – you’re going to cut certain things off from your teenager. And if not your teen, then certainly your 18-year-old, 22-year-old, etc.

I recommend gradually moving more money responsibilities over to your teen as they age so that they’re not thrown into the deep end in their first apartment, shocked by water bills, surprised by electricity bills, and wondering how to pay for cable since their rent was due, fyi.

This point feeds into that. Since you, the parent, are no longer going to be paying for everything for your teenager, they need to save their money.

Money responsibilities they may need to pay for:

  • Smartphone data plan
  • Gas for car
  • Car insurance
  • Weekend friend meet-ups
  • After school vending machine trips
  • Car repairs
  • Non-school uniform/extra clothes
  • Etc.

Haven’t given your teen any money responsibilities?  No worries. Check out my articles on 58 common teen expenses, and 7 conversations to have with your teen when they get their first paycheck to help.

5. Because People Like to Help People who are Helping Themselves

Now’s a great time to explain to your teenager that when they help themselves – in this case, either saving money towards a savings goal they have, or building up an emergency fund – then other people (such as you) are much more likely to want to help them out.

“Help” could look like:

  • A savings match contribution towards their savings goal (from a parent, or even from a bank opening bonus when you’ve saved a certain amount of money to open an account with)
  • Helping them out of a financial snafu, since you know they’ve been pretty financially responsible
  • Employer retirement plans where there is a matching contribution
  • Etc.

6.  Because as You Get Older, You Gain Both Rights AND Responsibilities…and those Each Cost Money (Whether You Have it Or Not)

Young adulthood is SUCH an interesting time – exciting, nerve-wracking, and tons of opportunities your teenager has never even dreamed of before.

We want the best for them, but we also want to prepare them for the added responsibilities that come with all those cool new rights and privileges they have being an adult.

Explain to your teenager that with rights come added responsibilities – and money responsibilities are part of that.

For example, they’ll get to stay out as late as they’d like, work wherever they want to, live wherever they want to, and date whoever they want to.

BUT, they’ll also be in charge of getting themselves up on time to get to work, pay for the gas, car insurance, and apartment needed to live near work, and feed themselves 3 meals/day + snacks, 7 days a week.

To prep for this, they need to start saving their money. It’ll give them something to fall back on when they, inevitably, make some stumbles in their money management. Here's 3 sample budgets for 18-year-olds.

Psst: not sure what kinds of money mistakes might befall them? Here's my article on 33 common financial mistakes people make.

7. Because Credit Cards Make a Bad Plan B

Your teen may be thinking in the back of their head that they can always fallback to a credit card in times of overspending or financial emergencies (inspiring them to continue with their current, no-saving-money behaviors).

Many adults think this, too.

However, there's a big difference here. Because adults likely already have established credit, which helps them to do things like increase a credit line in a financial emergency, or have a credit card at all.

Pssst: not that it's a great idea to use credit as an emergency fund, but I just wanted to point out the difference here.

Your teen should know NOW, when they still have time to save up money for that next stage in life, that it’s harder for a young person with no previous credit to get accepted for a credit card.

And if they can’t get one and that was their backup plan? Well, they’ll be in a pickle.

Instead, save up some buffer money, now.

8. Because Proactive Money Management is Always Better than Reactive Money Management

There’s a difference between proactive money management, and reactive money management.

And your teen should know this before they leave the house.

Proactive money management is taking actions today and making decisions today with the intention to positively affect your financial future. It’s about getting ahead of potential financial pitfalls, instead of waiting for them to happen before doing something about it.

Examples include:

  • Saving money in an emergency fund (ding, ding, ding!)
  • Saving money towards a savings goal
  • Investing in a retirement account for retirement
  • Writing out a spending plan for your next paycheck
  • Getting proper insurance policies set up with deductibles they can afford (because they have the money saved in an emergency fund)
  • Etc.

Reactive money management is waiting for financial situations to fall upon you, and then taking actions and making decisions with no real plan and resources limited to what you can scrounge together right now.

Examples include:

  • Not saving any money for college nor applying for scholarships or grants, causing you to either not go or to take out tons of student loans
  • Falling behind on your electricity payment in the winter because, even though utility costs increase in the winter, you didn’t prepare your checking account for that
  • Getting a flat, then putting the new tire purchase on your credit card because you don’t have any savings or extra money in checking to pay for it
  • Etc.

9. Because You Can Start to See the Real Power of Money, Over Time

Your teen may not be impressed with their allowance, or chore commissions, or even their weekend job paychecks. That’s fine.

But what they need to be able to see is that adding up their money, over time, can give them wayyyyyy more purchasing power than just one paycheck or just one allowance.

When I help parents guide their kids towards savings money, I say to begin with just saving some money from one pay cycle (this could be their weekly allowance, weekly chore commissions, or a paycheck) to the next.

Meaning, to just not spend everything in one pay period.

After that? Go after a short-term savings goal.

A short-term savings goal for teens is something that will cost more than one pay cycle, but less than 1 month, to save up for.

Encouraging your child to take on a short-term savings goal will show them that small amounts of money really do have a lot of power, given time.

Which, thankfully, your teen has lots of!

I hope I’ve not only given you some really solid reasons to save money for teens that you can share with your own teenager, but that these will convince your teenager to actually start saving their money. And I'd love to hear about what your teen thinks in the comments below – which one helped them grasp the importance of saving money as a teenager?

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Amanda L. Grossman is a Certified Financial Education Instructor, a 2017 Plutus Foundation Grant Recipient, and founder of Money Prodigy. Amanda's kid money work has been featured on Experian, GoBankingRates, PT Money, CA.gov, Rockstar Finance, the Houston Chronicle, and Colonial Life. Read more here.